Solid revenue boosts YRC bottom line

But the Overland Park freight hauler sees a slow-up in ’06’s last quarter.

YRC Worldwide Inc.’s profits were up about 12 percent on record revenues in the third quarter, the firm reported Thursday.

But the largest U.S. trucking company said it expects a slowdown for the remainder of the year as the economy downshifts.

For the three months ending Sept. 30, the Overland Park-based company posted net income of $95.79 million, or $1.64 a share, on $2.57 billion in revenue.

During the comparable period last year, YRC earned $85.29 million, or $1.42 a share, on $2.49 billion in sales.

The third-quarter earnings-per-share figure included expenses of 8 cents a share for reorganization costs and losses on a sale of a subsidiary and other property. YRC said it does not consider it part of its core operations, which would put its adjusted diluted earnings per share at $1.72.

The average estimate among trucking analysts for YRC’s third quarter had been $1.73 a share, according to a Thomson Financial survey.

“We delivered a solid quarter with record revenue and earnings per share,” said Bill Zollars, YRC’s chairman and chief executive, in a news release. “Our operating companies continued to execute well while effectively reducing our cost base.”

Zollars said that all of YRC’s units have performed solidly this year. “With that said, the economy is growing at a much slower pace, and we believe that will impact our earnings growth in the fourth quarter.”

YRC said it expected fourth-quarter earnings between $1.40 and $1.50 a share, which would put full-year earnings at $5.45 to $5.55 a share. YRC previously had forecast full-year earnings of $5.65 to $5.85 a share.

Other trucking companies that have issued third-quarter reports also have said their businesses were being affected by a slowing U.S. economy.

Jason Seidl of Credit Suisse lowered his YRC quarterly forecast to $1.66 a share earlier this month, noting that other carriers had lowered estimates based on evidence of a sluggish domestic economy.

Seidl’s report on Oct. 2 also lowered YRC’s full-year earnings estimate for 2006 to $5.50 a share from $5.73 a share.

Nevertheless, Seidl said the cost savings that YRC should realize from its acquisitions of Roadway Corp. and USF Corp. should continue into 2007, making it an attractive stock.

“As such, we maintain our position that YRCW is a solid choice for investors seeking exposure to the trucking industry that are not averse to volatile stocks,” Seidl said in his report.

Before earnings were released, YRC’s stock rose 39 cents and closed at $39.20 a share.

In after-hours trading, the stock price dipped to $38.50, down 70 cents an hour after the markets closed.